Gladstone Central Qld, 550km north of Brisbane
Key influences: Boom Towns, Government Decision, Transport Infrastructure Regional centre with strong industrial economy, plus tourism; $3.5 billion expansion of port; potential for $40 billion in investment in multiple CSG/LNG processing plants; $2.2 billion steel project. Typical houses: $330,000 West Gladstone, $375,000 Kin Kora, $380,000 New Auckland, $375,000 Clinton, $295,000 Toolooa.
Queensland‟s Gladstone (there are three other towns so-named in Australia) carries the postcode 4680 and has a deserved reputation as the minerals processing hub of the east coast.This central Queensland port city carries the Ugly Ducking tag by virtue of the many smokestacks and processing plants that make Gladstone the State‟s industrial powerhouse. As you might expect from a city that depends on minerals and mining for itslivelihood, Gladstone‟s fortunesf luctuate with the commodities cycle. Its upward spiral has paused recently, but looks set to resume on the back of major industrial developments.
Location
Gladstone is 550km north of Brisbaneand 100km south-east of Rockhampton, between the Calliope River and the Boyne River, both of which contribute to the city‟s deep water harbor. The Gladstone LGA includes 14 islands, the largest of which (Boyne and Curtis) are the sites of major industry.
Population & Demographics
Postcode 4680, which encompasses much of the Gladstone city area, has a population of about 42,000. The region belongs to young people, with 88% of the population aged under 60 and 61% of people aged 39 or younger. 86% of Gladstone‟s population was born in Australia. The „Nappy Valley‟ demographic (24% are under 14 years of age) probably accounts for the relatively high proportion of people with mortgages (37%) and those who are renting (32%). The proportion that has paid off their homes (24%) is below the Australian average (33%). Nearly half of those with mortgages are paying between $600 and $999. The median weekly household income ($1,189) is higher than the Australian average, as is the median individual weekly income ($534 per week compared with $466). The top two occupations (trades and production & transport) account for 15% of the city‟s workers – above the 10% state average. Gladstone is Queensland’s Newcastle: plenty of lifestyle features based on its river-meets-the-ocean setting, but with an industrial backdrop and an internationally significant export port.
Economy & Amenities
Gladstone is somewhat at the mercy of the ups and downs of international commodity prices and demand for Australian minerals. Gladstone‟s reputation for producing aluminium and nickel from the Boyne Island smelters, not to mention the much-expected but not-yet-delivered shale oil, has seen Gladstone boom in 2004-2007. But the economic downturn and decline in resources sector has stalled the city. Better times may be coming post-2010, with private enterprise and the Queensland Government pushing hard to make the city a genuine competitor to Western Australia on coal seam gas (CSG) and its potential to be converted to Liquified Natural Gas (LNG). One of the world‟s biggest operators (ConocoPhillips) is in a joint venture with Origin Energy to manage the largest of four proposed CSG/LNG projects. Their Australia Pacific NLG project includes a processing plant on Curtis Island near Gladstone. Queensland Premier Anna Bligh says Gladstone‟s LNG industry has the potential to support 18,000 new jobs over the next 10 years. CSG specialist Arrow Energy is proposing a 467km pipeline to bring CSG from the Surat Basin to its proposed LNG plant in Gladstone. Other projects which aim to build LNG storage facilities are also in the pipeline, so to speak, but all of these projects are timed to start construction between 2011 and 2014. Bligh, whose love of photo oportunities at industrial sites extends to a personalised hard hat, recently announced plans for a new steel plant in Gladstone. The $2.2 billion Boulder Steel project could support up to 4,500 jobs, including the construction phase, the operational side and all the downstream jobs that would be generated.
Property Profile
Gladstone was a chart-topping target for growth-hunters in 2006 and 2007 – but, after a period in which house prices rose 20% or more each year, capital growth evaporated. The median prices for many Gladstone suburbs went from the low $200,000s to the mid- $300,000s in two years. The data shows that the market peaked in 2007 (a 40% growth year for some suburbs) and that 2009 has seen values contract in some locations. Gladstone lost appeal for investors once typical prices shot above $350,000 and that coincided with the economic downturn and decline in the resources sector, on which Gladstone is heavily reliant. But there is a good chance we will see a resumption of growth in 2010. The dynamics that made Gladstone a compelling destination for investor‟s money three years ago have not changed – if anything, they have become more striking. House prices, generally, have fallen over the past year. Most suburbs of Gladstone have seen their median house prices decline by 2-7% over the 12 months to July 2009. A few have had 8-9% decreases. The correction was to be expected after several years of extraordinary growth, which had started to wane before the global economic downturn struck. Despite the recent decline, most Gladstone locations have long-term growth rates (the average rise in median prices over 10 years) averaging 14-16% per year. It‟s noticeable that the suburbs with the highest long-term growth rates are the cheapest suburbs (a factor common to most cities around Australia). At the moment investors should be able to shop around and find good houses in the Gladstone suburbs in the low $300,000s (and sometimes in the high $200,000s). Houses make up about 85% of the dwelling stock. The relatively small number of unit sales indicates median prices of $270,000 in South Gladstone, $280,000 in New Auckland and $230,000 in West Gladstone, according to APM. The rental market seems divided into two price brackets – the $200 to $275 per week category (many of which are units and townhouses) and houses renting for $350 to $460 per week and more (this price category also include luxury townhouses). Typical income yields for houses tend to be in the 4.5% to 4.9% range, but a few suburbs have yields around 5.5%, according to APM. Living in Gladstone would surely be more pleasant for those with air conditioning and a pool, but expect to pay more for these luxuries.
A snapshot of the Gladstone residential market Suburb Median house price 1yr growth (Jul09) 10yr growth rate.
- Barney Point $ 280,000 -7% 18%
- Boyne Island $ 405,000 -2% 15%
- Clinton $ 375,000 2% 13%
- Gladstone South $ 315,000 -7% 16%
- Glen Eden $ 430,000 10% 14%
- Kin Kora $ 375,000 3% 14%
- New Auckland $ 380,000 -3% 15%
- Sun Valley $ 320,000 -8% 14%
- Tannum Sands $ 440,000 -8% 16%
- Telina $ 375,000 -2% 14%
- Toolooa $ 295,000 -9% 19%
- West Gladstone $ 320,000 -7% 17%
Prospects
Gladstone could really flourish if, as they say, all of the ducks come in to line at the same time. For example, the planned expansion of Gladstone's coal port will help meet rising international demand. In April 2008, the Federal Government approved the environmental impact statement for the proposed Wiggins Island terminal. By November, the project had reached “preferred proponent status”, enabling funding to be concluded in 2009. The $3.5 billion terminal is expected to double export capacity from Gladstone port to 150 million tonnes per annum and generate up to $1.8 billion in export earnings annually. Premier Anna Bligh says at least 16 coal companies are backing the project. Bligh says the potential of Gladstone‟s LNG industry is capital expenditure totalling $40 billion and 18,000 new jobs over the next 10 years.
Some of the biggest names in the resources sector plan plan to generate LNG by extracting coal seam gas (CSG) from the Surat and Bowen basins and piping it for processing at Gladstone – which has a substantial and growing export port. The ConocoPhillips joint venture with Origin Energy, described earlier, is the largest of four Gladstone projects planning to convert CSG to LNG. Arrow Energy is seeking approval for a 467km pipeline to carry CSG from the Surat Basin to the site of its proposed LNG plant in Gladstone. Arrow hopes to start building the pipeline in 2011, with the first gas to be processed early in 2013.
Fluor has been awarded a $16 million contract for Front End Engineering & Design services for Santos‟ LNG project at Gladstone, which entails construction of a 435km gas pipeline and an LNG liquefaction plant. And Gladstone LNG has moved closer to obtaining its LNG development licence after regulators approved its Membrane LNG tank technology. The company will install a 200,000 cubic metre tank at its Fisherman‟s Landing site, to be operational by 2012. A new shale oil plant is being planned near Gladstone. It is sure to be controversial because it is proposed for the site of a previous operation which forced the relocation of a community because of pollution. The State Government spent $50 million buying 152 properties at Targinie in 2004 following the closure of the Stuart shale oil plant, after thousands of pollution complaints.
Now Queensland Energy Resources is seeking approval for a new plant to demonstrate improvements in technology. Other action in the city includes stage two work on the upgrade of Gladstone‟s airport runway. The economic news for Gladstone is not all positive. Construction of a $3.65 billion nickel refinery planned for Gladstone will be delayed at least two years, after Gladstone Pacific Nickel Ltd lost the backing of China Metallurgical Construction Corp. The Chinese company has backed away because of the poor nickel market conditions. But with the number and scale of other developments in the pipeline for the city, it hardly seems to matter. If all the proposed projects go ahead, the resultant increase in the number of workers would lead to an urgent demand for housing. And once again we could see the surge in prices which took Gladstone by the throat in 2006 and 2007. Storage silos on the Gladstone waterfront.
| Next > |
|---|